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Farmers to be offered equity in sugar-from-biomass project

Corn is harvested along Waterworks Road in Sarnia, in this file photo. The Cellulosic Sugar Producers Cooperative, a group of Ontario farmers, has entered into a memorandum of understanding with Comet Biofining, a London-based company planning to build a sugar-fro-biomass plant in Sarnia. The arrangement with Comet will allow farmers involved in the co-op to own equity in the plant expected to produce sugar, from corn stalks and leaves, for use in making biochemicals and fuels. (File photo/The Observer)

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Farmers will have the opportunity to be more than suppliers for a sugar-from-biomass facility planned for Sarnia.

The Cellulosic Sugar Producers Cooperative, group made up of Ontario farmers, said Monday it has reached a memorandum of understanding with Comet Biorefining, a London-based company planning to build a plant at the TransAlta Energy Park in Sarnia to convert corn stalks and leaves, as well as wheat straw, into dextrose sugar for use in making biochemicals and fuels.

Earlier this year, Comet Biorefining received nearly $10.9 million in federal grant money to help establish the plant that’s expected to be operating by 2018.

The producers’ co-operative was formed two years ago after Bioindustrial Innovation Canada (BIC), a Sarnia-based not-for-profit organization, and its partners began looking into the potential of a farm biomass-to-sugar project and were approached a group of farmers.

“We were involved in BIC's project, evaluating the different technologies, ” said Dave Park, a Sarnia-area farmer who is president of the co-operative and a director with the Grain Farmers of Ontario.

That led to the relationship with Comet Biorefining, a company that Park said co-operative members were comfortable with.

“We developed a joint business plan with them to create an entire value chain for conversion of corn stalks to sugars that would be processed into biochemicals.”

Park said the co-operative expects to organize meetings this summer to talk with more farmers about becoming involved.

“The way the business plan is set up, farmers would be equity partners in the plant,” he said.

The co-operative's role will be gathering and transporting biomass, primarily corn stover made up of stalks and leaves, to the plant in Sarnia, as well as being an equity partner, Park said.

Because of that, farmers involved in the project would earn income from the stover supplied to the plant, as well as a portion of the income from the sugar produced and sold.

“It moves the farmers up the value chain,” Park said.

Details on how much money farmers are expected to invest in the project are expected to be released during the meetings later this year, Park said.

The co-operative is currently completing regulatory requirements to raise equity for the project.

“It's important for farmers to be in on the ground floor of this new industry as it develops in our area,” Park said.

Previously, he said it was expected farms supplying stover would be located within one hour's drive of the proposed plant.

The size of the proposed plant, expected to require more than 60,000 tonnes of corn stover or wheat straw annually, was a good fit for the co-operative, Park said.

“When we were going through the business analysis, there was a comfort, for the cellulosic sugar co-op, that this is scalable and doable,” he said.

“There was a lot of trust within our group that we could make this work.”

Andrew Richard, the founder of Comet Biorefining, said in a press release the co-operative shares the company's vision of “developing a world class value chain to produce high quality dextrose from underutilized agricultural residuals, cost competitively.”

He added, “We are extremely pleased to work with the co-operative to help enable an expansion of the bio-economy in Ontario.”

Park said corn stover is “a very sensible feedstock, ” because it uses an existing crop, and doesn't take land away from food production.

“From a farmer's perspective, it's a way to add value to a crop we already produce.”

And the new market for stover comes as the amount of corn stalks and leaves available has been growing because of improvements in crop yields, he said.

At the same time, removing a portion of the corn stalks at harvest time should lead to other benefits for farmers, including reduced tillage in the fields. That, he added, will help lower fuel costs and greenhouse gas emissions.

The BIC-led project that led to Comet Biorefining's announcement of a plant for Sarnia was funded through a federal-provincial initiative.

Murray McLaughlin, BIC's executive director, said the group is excited at the prospects of establishing Canada's first commercial scale agricultural biomass to cellulosic sugar value chain.